Terms of Business

Management

Having received your instructions to act on your behalf in the letting of your property we will actively market your property in an effort to secure suitable potential tenants. After interviewing potential tenants and assessing their suitability we will seek comprehensive and satisfactory references from a reputable credit referencing company, their employer(s) and from their last landlord, if applicable Subject to satisfactory replies to our enquiries, we will agree a tenancy. When a tenant has taken possession we will demand rent and inspect the property periodically.

Optional Rent Guarantee and Legal Expenses

Whilst we make every reasonable effort to ensure your tenants are up to our usual high standards, as with every lettings agency occasionally a tenant may default on rent payments, whether intentionally or unintentionally, or may become an unsuitable tenant. Working in collaboration with our credit referencing agency we can offer an insurance guaranteeing all rent arrears (except the first month) are paid in full and should the need arise to evict the tenant, their specialist legal team will complete and serve all paperwork at no cost to yourself.

Inventory

We undertake to prepare an Inventory of the contents and a Schedule of Condition of your home at the start of the letting and to check the Inventory and Schedule of Condition at each change of tenant. Revised inventories are prepared for subsequent tenants.

Dilapidations

We obtain from the tenant, prior to the commencement of the tenancy, a deposit against damage and non-payment of rent, which we are legally obliged to place with a Government approved holding scheme. At the time the tenant leaves your property the inventory will be checked and a schedule of dilapidations, if necessary, will be prepared. The cost of any repairs, cleaning etc. will be deducted from this deposit returned to the tenant by the appointed scheme if they agree. If they do not agree the scheme allows for an independent adjudicator to assess the claim, whose decision is final.

It must be remembered that the property is subject to a “fair wear and tear” clause and will be subjected to the stresses and strains of everyday living. A property cannot be expected to be in the same condition at the end of a letting as it was at the commencement. Internal decorations may need attention after two or more year’s occupation by tenants.

The full replacement costs of many articles found defective cannot always be charged against the tenant as in many cases these articles will have undergone varying lengths of usage. All items left in a tenancy that are the landlord’s responsibility must be maintained in working order.

Income Tax

Income from property is treated as unearned income and therefore subject to income tax at the standard rate.

From April 6th 1996 a new tax regime came into force regarding the taxation of landlords living abroad, including service personnel. The main effect of this new “Non Resident Landlord’s Scheme” is that we are required to register with the Inland Revenue and deduct income tax at the basic rate from the rental income after allowable expenses have been deducted and remit this to the Inland Revenue quarterly. We are also required to issue you with a Certificate of Tax Paid at the end of the Financial Year. The only way we can pay rent to an overseas landlord without tax being deducted is if we are in receipt of an exemption certification issued by the Inland Revenue. Provided the Inland Revenue are satisfied that you have complied with UK tax obligations in the past, and will do so in the future, there is a very good chance that they will issue a certificate.

Allowances in Broad Outline

Allowances that can be set against Rental Income are:-

Types of Tenancy Agreement

Under the Housing Act 1988 as amended by the Housing Act 1996, the tenancy will be an Assured Shorthold Tenancy of minimum 6 months duration. (Shorter terms are possible although tenants have the right to stay for 6 months).

With an Assured Shorthold let the rent payable is a matter for negotiation between landlord and tenant.

The main benefit of the Assured Shorthold Agreement is that the landlord can be sure that at the end of the tenancy, provided the required notice is given, he will get possession of his property.

At the end of an Assured Shorthold Tenancy, in agreement with both landlord and tenant, there are broadly two choices. Firstly a new Assured Shorthold Tenancy for six or twelve months can be commissioned, which is paid for by the tenant. The second option is for the tenant to go onto a Statutory Periodic Contract, which is in effect a rolling contract. The main difference with this type of contract is that both the landlord or the tenant can give two months notice, whereas with an Assured Shorthold Tenancy the landlord can only gain possession of the property if the tenant has breached any term of the contract. The tenant can only give notice before the expiry of the period with the prior agreement of the landlord.

What Should be Left?

Many clients have varied ideas on what should be left in the property. It very much depends on the nature of the property, its situation and environment etc. If a landlord considers the situation from the potential tenant’s point of view it will become apparent that those properties well presented and with a high standard of furnishings and equipment will attract a higher rental value than those not so well presented and equipped. (it very much depends to which segment of the letting market the property will appeal). An unfurnished property simply equipped with cooker, carpets and curtains may well, for example, attract a long let simply due to the cost of furniture removal. Alternatively, a property poorly equipped may require continual maintenance and repair throughout the letting period resulting in a reduction in the spendable income available to the landlord.

PLEASE NOTE: All furniture (in particular soft furnishings such as beds/mattresses, suites and padded upholstery) supplied with the property must comply with current legislation regarding fire resistance.

Mortgages

PLEASE NOTE THAT THE CONSENT OF YOUR MORTGAGEE MUST BE OBTAINED BEFORE YOU ENTER INTO A LETTING AGREEMENT WITH A MORTGAGED PROPERTY.

Mortgagees may require us to supply copies of the Tenancy Agreement and in some cases a fee is required before they will consent to you letting your property.

General

Gas Appliances

It is now compulsory for landlords to ensure that all gas appliances and the gas installation in their properties are checked for safety at least once a year by a CORGI registered installer. A record of checks must be kept to be produced to tenants if required. Unless otherwise instructed we organise annual Landlords Gas Safety Certificates and deduct the cost from the following months’ rent.

Electrical Equipment

Legislation requires that the electrical installation and equipment in a let property should be safe. It may, therefore, be necessary for an inspection to be made periodically by a qualified electrician in order to demonstrate that all precautions have been taken. We recommend that before a property is let for the first time an inspection of the wiring and any electrical items are made by a qualified electrician.